Anne Arundel General Hospital, Inc. v. O'Brien

432 A.2d 483, 49 Md. App. 362, 1981 Md. App. LEXIS 318
CourtCourt of Special Appeals of Maryland
DecidedJuly 13, 1981
Docket1641, September Term, 1980
StatusPublished
Cited by28 cases

This text of 432 A.2d 483 (Anne Arundel General Hospital, Inc. v. O'Brien) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anne Arundel General Hospital, Inc. v. O'Brien, 432 A.2d 483, 49 Md. App. 362, 1981 Md. App. LEXIS 318 (Md. Ct. App. 1981).

Opinion

Liss, J.,

delivered the opinion of the Court.

On June 30, 1980, four radiologists, Robert W. Frazier, M.D., Matthew J. Cerny, Jr., M.D., Joseph F. Smith, M.D., and Stephen R. Brown, M.D.,* 1 and their professional association, including each of the named doctors (hereinafter the "Frazier P.A.”), filed a bill of complaint in equity in the Circuit Court for Anne Arundel County against the Anne Arundel General Hospital, Inc. (hereinafter the "Hospital”), the Hospital’s administrator, Carl A. Brunetto (hereinafter "Brunetto”), Barry H. Friedman, M.D., (hereinafter "Friedman”) and Barry H. Friedman, M.D., P.A. (hereinafter the "Friedman P.A.”).

David A. O’Brien (hereinafter "O’Brien”) and his professional association (hereinafter the "O’Brien P.A.”) filed a *364 similar declaration in law against the same defendants. The bill of complaint and declaration alleged breach of contract, equitable estoppel, interference with business relationship, violation of federal and state antitrust laws, fraud, and violation of due process. The plaintiffs sought ex parte interlocutory and permanent injunctive relief, damages, and prayed a jury trial. On June 30,1980, the court issued orders denying the requests for ex parte injunctive relief. On July 25, 1980, the action filed in equity was transferred to law and the two cases were consolidated.

On August 18, 1980 a seven-day evidentiary hearing was held on the radiologists’ request for an interlocutory injunction. At this hearing the plaintiffs requested the court to require the Hospital to reinstate their privileges at the Hospital pending the final disposition of the case and further sought to have the court require the Hospital to grant the radiologists a hearing on their entitlement to privileges at the Hospital. By memorandum and order the trial court directed the Hospital to grant the radiologists a hearing on the question of their right to privileges at the Hospital; but denied their requests for temporary reinstatement and denied interlocutory injunctive relief as to Brunetto, Friedman and the Friedman P.A.

The trial court based its decision on the following four reasons:

1. The Hospital’s bylaws guarantee a due process hearing whenever privileges are terminated.

2. The Fourteenth Amendment right to due process protects the radiologists against termination without a hearing.

3. Substantive due process required the Hospital to demonstrate that the termination of the radiologists’ privileges was not arbitrary and capricious.

4. A hearing granted O’Brien in a prior privilege dispute set a precedent for granting a hearing to the radiologists.

From these judgments, appeals and cross-appeals were noted.

In the interest of clarity we shall indicate the status of the parties in these appeals. The Hospital and Brunetto are *365 appellants and cross-appellees. Friedman and the Friedman P.A. are cross-appellees only. Frazier, Cerny, Smith, Brown and O’Brien and their several professional associations are appellees and cross-appellants.

Although the appellants raise four issues in their’ briefs, we conclude that a decision on one of the issues is dispositive of the others as well. That issue is:

Whether the radiologists were entitled to a hearing on their asserted right to continue to have medical staff privileges at the Hospital?

The statement of facts presented by the appellants is as follows:

Frazier, Cerny, Smith, Brown and O’Brien provided radiology coverage to the Hospital pursuant to a contract which expired on June 30, 1980 and pursuant to medical staff privileges granted by the Hospital which expired on the same date. Four of the physicians were shareholders in the Frazier P.A. O’Brien provided radiology coverage under an agreement with the Frazier P.A. The radiologists were not admitting physicians but were "hospital based physicians,” i.e., they did not admit patients to the Hospital; they were not responsible for the overall care and treatment of the patient; they performed certain diagnostic tests and procedures only upon the request of the admitting physician and reported their findings to the admitting physician for his information. Both the Frazier P.A. and the O’Brien P.A. maintain offices outside the Hospital where they perform tests and diagnostic procedures upon request of physicians for non-hospitalized patients.

The Hospital is an acute, non-profit, tax-exempt community hospital, licensed by the State of Maryland and accredited by the Joint Commission on Accreditation of Hospitals. It is a provider of care under contract with the Medicare and Medicaid programs. It is a private hospital controlled by a governing board (the Board of Managers, hereinafter the "Board”) elected by members of the corporation. It received certain financial assistance from Anne Arundel County, and the Federal government under the *366 Hill-Burton program. The defendant Brunetto is its administrator.

Friedman is a physician who (by the Friedman P.A.) contracted to provide hospital coverage as of July 1,1980 for all "diagnostic imaging” services which includes radiology, nuclear medicine, ultrasound and computerized tomography scanning.

On January 24, 1980 the Hosptial and the radiologists entered into an agreement extending the terms of their existing contract to June 30,1980. The extension agreement stated, in pertinent part:

1. The terms of the Agreement are extended until June 30, 1980 at which time it shall automatically terminate without any notice or action on the part of either the Hospital or the Radiologists.
2. It is expressly acknowledged and agreed that after June 30, 1980 there shall be no agreement in effect between the Hospital and Radiologists or between the Hospital and any physician officer, shareholder, employee or contractor of said Radiologists, unless said agreement is in writing and duly executed by the parties thereto after February 1, 1980.

No subsequent agreement was entered into and the contract expired June 30, 1980.

On the same day that the contract was extended, the Hospital Board also granted staff privileges to Frazier, Cerny, O’Brien and Smith 2 for the same time period — through June 30,1980. This was a departure from the usual Hospital reappointment practice of granting privileges for a full medical staff year. Accordingly Brunetto sent each a special notice in addition to the standard appointment letter. Each *367 radiologist signed an acceptance of the appointment and none objected to or appealed from the appointment of limited duration. On June 30, 1980 the contract and medical staff privileges expired.

On January 24, 1980 the Hospital Board appointed Friedman chief of the imaging department, after a formal selection process. The imaging department was a newly created consolidation of the former radiology and nuclear medicine departments. The terms of the Hospital’s contract with the Friedman P.A. became effective July 1, 1980.

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432 A.2d 483, 49 Md. App. 362, 1981 Md. App. LEXIS 318, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anne-arundel-general-hospital-inc-v-obrien-mdctspecapp-1981.